Why It’s Important for Business Leaders to Invest in Education For Their Employees
Many businesses balk at the idea of pouring money into education and training for their employees. Those businesses are being penny wise but pound foolish — there’s a wealth of evidence (both statistical and anecdotal) that says it’s a worthy investment. Some argue that with rising turnover rates, the idea of putting significant funds into someone who has one foot out the door is a waste. Let’s look at some reasons why that way of thinking is short-sighted.
Investing in Education Can Produce Leaders
The Deloitte Human Capital Trends Report highlighted a major issue for most companies today — leadership. In fact, according to the survey, the second-biggest concern for businesses in today’s climate was a lack of leadership. By contrast, a Bersin by Deloitte study found that 30 percent of respondents didn’t feel ready to take on a leadership role. A degree in business, or at least training in a business program, can help fill this leadership gap.
Aside from managing finances, understanding economics and balancing books, business programs give students plenty of opportunities to develop leadership skills. Students are often asked to manage projects, run mock businesses and work closely with fellow students; all of these tasks foster leadership skills that translate to the real world.
Investing in Education Boosts Self-Esteem
Employees often shy away from important tasks or pass them along to management because they feel like they can’t handle them. They worry that they’ll mess something up and be held responsible for it.
Well-trained employees, on the other hand, welcome new tasks. They take pride in tackling projects that challenge them and give them a chance to show off their capabilities. Employees who have this confidence are more willing to take on new job duties, which can lift some of the burdens on management.
Investing in Education Increases Professional Development
No one wants to be stuck in a dead-end job with no chance for advancement. This is especially true for Millennials, for whom loyalty to one company is less important than previous generations. In fact, according to the 2016 Deloitte Millennial Survey, 66 percent of Millennials expected to leave their current jobs within five years. Perhaps even more shocking was the fact that a whopping 25 percent were planning to head for the exits within one year.
One of the main reasons respondents gave for this gap in loyalty was a feeling of neglect and a lack of development opportunities — 63 percent said their “leadership skills [were] not being fully developed.” Those who did have professional development opportunities felt a greater sense of purpose within their roles.
Investing in Education Can Be Cheaper in the Long Run
With the alarming rate at which employees today leave their jobs for greener pastures, it might seem counterintuitive to carve out cash in the budget to invest in more training. After all, aren’t they just going to take that training and use it elsewhere (perhaps even a competitor)?
While turnover is higher than ever, there are data that show employees are much more likely to stick around if they feel they aren’t stagnating. The aforementioned Deloitte Millennial Survey uncovered some interesting numbers in this regard:
- 83% of Millennials who stayed for more than five years with a company said they were satisfied with their professional development
- 71% of Millennials who expected to leave within two years said their leadership skills weren’t being developed
- “Opportunities to progress/be leaders” was the second-highest consideration for whether to leave or stay
The cost of headhunting, hiring and training new employees every couple of years can be significantly higher than training current ones. A study by the Society for Human Resource Management found that it takes around 42 days and $4,129 to hire someone new (which is both expensive and unproductive). The National Association of Colleges and Employers found that number to be higher — $7,645 for companies with 0-500 employees.
Even if the cost of training comes out to about the same amount, the loss in productivity caused by all that turnover can’t be overstated.
Investing in Education Attracts Top Employees
There’s no question that the war for great workers is heating up. To attract top-level employees in the past, employers needed to offer a competitive salary, good retirement plans and solid health insurance. Now, a healthy benefits package includes educational opportunities. This shows potential employees that they’ll have the chance to grow.
How to Get Started
We’ve outlined how important education and training programs are for today’s businesses, but how do you institute these programs in meaningful ways as an employer? There are several approaches.
You want to make sure training opportunities are aligned with the company’s goals. So first, you’ll want to take a look at where the company is lacking. Is it in leadership? Are employees willing to take on new tasks? Are practical business skills a problem area? Is communication where it should be? Once you identify the issues, the type of training that’s worth the investment should become clear.
You can send employees to professional development and trade conferences. If it’s soft skills that are lacking, you might consider leadership and communication confabs. If practical skills are coming up short, investing in graduate business certificate programs or sending employees to trade schools or community colleges might pay the biggest dividends. Or if there’s a lack of cohesion, you might look into investing in peer-to-peer learning like mentorship and buddy programs.
Because workers want to feel utilized and take an active role in their development, many companies also let their employees decide what would be most beneficial. This method has seen a lot of success because it gives employees ownership and pride in their roles.
Whatever route you choose, know that you’re making a difference in your employees’ lives and investing in long-term growth.
This article has been published in accordance with Socialnomics’s disclosure policy.